Non-Profits: Goals vs. Execution

Non-Profits in the Free Enterprise World: A Brief History

Re-vitalizing the world via non-profit organizations implies a need that is presently unmet via more conventional (either governmental or for-profit) means.  Yet, there are over 1.5 million organizations presently.

Few accounts offer a key history of the non-profit world, particularly as it relates to America (www.canonprofits.org).  It notes that Americans have presently an 83% history of giving.  However, the events that shaped this American world have roots in the civil rights movement, President Nixon’s policies, and others.

In the 1600’s, a British “Statute of Charitable Uses” allowed money for “public good” to be tax-exempt.  Since that time, the US Bill of Rights, freedom of religion as a right, and ironically, a separation of church and state.  Today, religious organizations constitute a large percentage of non-profit organizations.

Non-profit organizations have served the wealthy, the poor, the minorities, the majorities, and promoted integration as well as segregation in some aspects.  Giving varies according to state.

Interestingly, around the time of World War II, non-profits worked on governmental medical projects; however, by the 1970’s, governmental funding superseded non-profit funding.  Some reasoning behind this may be that the boom in economic growth in the 1950’s led to misappropriation of funds, resulting in government requirements of non-profits reporting activities and regulations being introduced.  Eventually, a total amount of coroporate and individual giving was set – at $9 billion today.

A need to formalize non-profits (or at least organize them) was realized by Alexis de Tocqueville and subsequently by The Filer Commission – fostering a growth of organizations studying non-profits.

Non-profits are uniquely positioned, largely funded by public organizations but run privately.  There are presently over 1.5 million non-profit organizations in the United States (per the National Center for Charitable Statistics, www.nccs.urban.org).  The division of these, in terms of revenue proportion and total number proportion, appears below (from www.subsidyscope.org):

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As becomes apparent from the above, the growth of non-profits has been significant, but given their nature, it may be difficult to organize non-profits into a meaningful manner.  The ensuing sections will discuss this issue to some degree as well.

Making Non-Profit Soup Palatable

Re-uniting some of the same organizations as past years, two organizations held their annual meetings.  The Clinton Global Initiative focused upon general world problems with a common theme, and Faster Cures focused upon healthcare.  These were non-profits of non-profits, in the sense that they grouped works of non-profits into a collective set of goals.  Each encouraged further work, and helped facilitate collaboration and interaction.

Faster Cures did so in the health sector, and is a good model for what efforts in a single sector can do – by bringing together leaders of the FDA, NIH (National Institutes of Health), private industry, and academic institutions along with relevant funding experts, many synergies were established.  Faster Cures does something that many otherwise disorganized or inexperienced healthcare non-profits could not do – achieve a synergy which exponentially could offer solutions, rather than linearly or not at all.  In fact, smaller organizations (provided they can afford cost of entry, but may have other alternatives to participate) may benefit significantly from such guidance if provided from Faster Cures.

The same is true of the Clinton Global Initiative; yet, there is a prohibitive cost of admission for some non-profit organizations.  The Clinton Global Initiative goes beyond healthcare, affecting other community activities.  Its “star panel” includes heads of state (including current U.S. and other Presidents or Prime Ministers, leaders of numerous non-profits, and various notables.

There appears to be significant potential for exemplary organizations with the ability to “bring other organizations together, in an all-partisan atmosphere” to accomplish meaningful goals for the community.

So what can we learn to do, and not to do from such organizations, both of which have had recent meetings?  We consider that next, in the blog…

Non-Profit World: Well-Intentioned, Often Not as Well Executed

Return on investment for a non-profit may, in many cases, be measurable by both goals attained (such as decrease in crime by 50% in incidence) and subsequent cost savings (increased investment into the neighborhoods due to lower crime, etc.).

While we will consider the work of such a dedicated healthcare organization in detail in a subsequent section in the future, it brings up an important point – Faster Cures, or a likewise similarly experienced organization in healthcare is needed to ORGANIZE the many non-profits.  Either The Clinton Global Initiative, Faster Cures, the U.S. government (even though these are non-governmental entities), or some other independent agency, should organize non-profits.

One scheme to consider is ten categories (or more)… here is a start I have developed: (1) food; (2) shelter; (3) healthcare; (4) education; (5) employment; (6) financial planning; (7) environment; (8) safety; (9) arts & entertainment; (10) future planning.

If each present non-profit organization were to fit into one of these ten categories (or invent the ones missing), and then collaborate with others in their category, the results would be efficient and productive.  In addition, incentivizing the non-profits via monetary compensation for achieving a goal that truly benefits the society (realized as a return on investment via savings, for example, due to less crime, fewer visits to the doctor due to better maintained health, etc.) could be tremendous.  This would require three important changes: (1) the infamously competing non-profits to stop competing and consider synergizing, with all guaranteed to benefit from such work under this system; (2) founders to overcome ego and an adamant role to guide the organization despite its deviation from its true intended stated mission; (3) look carefully at a model which efficiently provides return on investment to the community.  The next step, of course, would be delivery.

One such community delivery model, on a block-by-block basis (or via a manageable radius of blocks) allows each of the above categories of non-profits to function through it.  At least theoretically until it is implemented on a wide scale nationwide, the Community Renewal model (www.communityrenewal.us) (already replicated in four cities and two universities), has resulted in certain instances problems such as crime have improved up to 50%.  While not presently engaging all ten aspects, the model could facilitate this.  Separately, programs from banks such JP Morgan or governmental entities such as the housing department may offer “return on investment” type funding for social innovation and implementation.

(Information for the above article has been acquired from numerous sources, including those listed above)

Ravish Patwardhan, MD